Hapag-Lloyd AG — Investor Presentation 2015

Aug 26, 2015

Investor Presentation – Half Year Results 2015

¹26 August 2015

"Way Forward" well on track

STRATEGIC HIGHLIGHTS H1 2015

• CUATRO: The integration is well on track substantial portion of synergies already realized in H1 2015
• HL targets net synergies of c. USD 400 m p.a. by 2017 (USD 100 m more than initially anticipated)
• OCTAVE: The additional cost saving program showed initial success and made noticeable contribution in H1
• OCTAVE expects to deliver annual improvement of approximately USD 200 m as of 2016
• In 2015, HL will continue to optimize the structure and improve the efficiency of its container vessel fleet
• By July, HL took delivery of the last 9,300 TEU ship
• In April, HL placed an order of five 10,500 TEU ships

• In H1 2015, HL invested USD 105 m into containers

• In a challenging market environment, HL significantly increased its EBITDA to USD 551 m (margin: 10.6%) in H1 2015 – EBIT reached USD 299 m (margin: 5.7%)

• Substantial cost synergies by the fast CCS1) integration and lower bunker costs more than offset weaker freight rates
• Driven by increased scale, the transport expenses per TEU decreased by 233 USD/TEU to USD 1,139/TEU (-17.0%)
• HL has a clear strategy to significantly improve its profitability in coming years

• The company intends to continue improving its EBITDA margin to 11–12%

• A. Strategy – "Way Forward" well on Track

• B. Industry Improving Mid-term Fundamentals
• C. Financials – Strong Earnings Growth Trajectory

We have a clear way forward – Our five key initiatives are off to a good start with significant further upside

Strong consolidation track record

• Canadian container shipping company with global network
• Leading regional market positions with a strong position on the Atlantic market
• 38 services worldwide

• Targeted net synergies of EUR 218 m in 2008

• Chilean container shipping company in Valparaíso

• Top 20 container player with focus on Latin America – largest carrier in this trade
• 39 services worldwide
• Targeted net synergies of USD 400 m in 2017

Transfer of operating business completed

CUATRO takeaways

• The integration process is running well / slightly ahead of plan – we have been able to build on the experience gained with CP Ships
• The migration of the CCS business to the Hapag-Lloyd systems has been completed in Q2 2015
• We target synergies of USD 400 m by 2017 onwards instead of the previously declared USD 300 m

Project OCTAVE: Further improvement measures across all areas of operations

Eight clear workstreams defined OCTAVE delivers as planned

Procurement &	Inland Pricing & Steering
Inland	Bunker Procurement
	Fleet Renewal
Fleet & Network	Fleet Refurbishment
	Service Structure
	Utilisation
Sales & Product Portfolio	Special Cargo
	Spot Market

Retiring of "Old Ladies" completed OCTAVE takeaways

• 3 main synergy areas identified with 8 defined workstreams, each with clear rationale
• Implementation of saving tracked by workstream, on a monthly basis
• EBIT savings of c.USD 200 m planned by 2016 part of which has been realized
• Further initiatives to be launched

10 Source: Company Information

Close the Cost Gap: New ships suitable esp. for Latin America underway – Further investments to come

Delivered: 10x 13,200 TEU

• Strengthened competitiveness and market share along with attractive margins as a result of the increased capacity
• Cost efficient "workhorses" suitable e.g. for Far East trades (Loop 4) – cascading of former vessel in Transpacific

Cost efficient growth e.g. on Far East trades

Delivered: 7x 9,300 TEU

• All seven 9,300 TEU vessels delivered by end of July 2015
• These ships are suitable for the Latin America trades with 1,400 reefer plugs

New order: 5x 10,500 TEU

• New ships will optimise network and product
• Bundle services / redesign cooperation
• Participate in reefer growth
• Generate considerable slot cost advantages
• Best ship design for the trade intended
• Optimised hull shape (less draft)
• Fuel efficient engine room setup
• 2,100 reefer plugs

Consolidate leadership esp. in Latin America

1) Others include APL, HMM, MOL, OOCL, NYK

11 Source: Company Information, MDS Transmodal July 2015

Already initiated… …with more to come

Improve competitiveness on East-West trades

• G6 plans to introduce ULCV loops to grow in line with market and remain competitive (12 ships ordered / more expected)
• The G6 alliance greatly reduces the risk during the phase-in of ULCVs in two ways (cascading and allocation sharing)

Investment in container to optimise cost structure

• Benefit from very low new container prices by purchasing rather than renting containers
• Increase ownership back to 50% (in line with operational peers) stabilising cash flows

Drivers for targeted tangible upside

Hapag- Top 20 World Fleet

Lloyd

					Vessel fleet structure as of 30 June 2015
		Owned1)	Chartered3)	Current fleet	Current orderbook		Fleet age [% of total capacity]
>10,000 TEU	Capacity [TEU] Vessels	131,674 10		131,674 10	52,945 5	MODERN	Average age 7.3 years5)
8,000 – 10,000 TEU	Capacity [TEU] Vessels	234,314 28	68,036 8	302,350 35	9,3004) 1	73% 45%	27% 55% 0%
6,000 – 8,000 TEU	Capacity [TEU] Vessels	49,743 7	39,438 6	89,181 13		≤10 years	10-20 years >20 years
4,000 – 6,000 TEU	Capacity [TEU] Vessels	68,152 15	242,904 51	311,056 66		Owned 52%	Fleet ownership [%] Chartered 48%
2,300 – 4,000 TEU	Capacity [TEU] Vessels	26,784 10	91,923 32	118,707 41			Average vessel size [TEU]
<2,300 TEU	Capacity [TEU] Vessels	5,996 3	30,213 20	36,209 23		+386 5,2625)	+2,063 4,876
Total	Capacity [TEU] Vessels	516,663 71	2) 472,514 1172)	989,177 188	62,245 6		3,199

1) Incl. 5 long-term finance leases 2) Incl. 2 chartered-out 3) includes long-term (>3 years), mid-term (1-3 years) and short-term (<1 year) charters 4) Delivery in July 2015 5) Weighted average age by capacity

12 Source: Company Information, MDS Transmodal July 2015

Compete to win: New commercial approach will drive mindset change and energise the sales organisation

Pilots well underway and implementation starting 2016

Agenda

• A. Strategy "Way Forward" well on Track
• B. Industry – Improving Mid-term Fundamentals
• C. Financials Strong Earnings Growth Trajectory

Attractive container shipping volume and global GDP growth1)

2000 – 2008 2014 – 2016e Transport volume 2010 – 2014 +8.1% Global GDP +3.7% +3.6% 2000 = Indexed to 100 GDP multiplier 1.9x 1.0x +4.2% 1.3x +5.4% +3.5% +3.8% +3.3% 100 150 200 250 300 350 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e Global GDP Global container shipping volume (loaded TEUm)

• Trade deregulation
• Global relocation of production facilities
• Private consumption and growth of real incomes in developing economies
• Container shipping positively correlated with GDP growth
• Growth to accelerate in 2016
• Global GDP: +3.8%
• World trade: +4.4%
• Container volume: +5.4%

1) Annual comparison of container volume growth rates and GDP growth rates since 2000

Containerisation dynamics are intact

Short-term freight rate pressures and volatilities will remain in the container shipping industry

Shanghai – Latin America (SCFI)

Comments

• Shanghai Containerized Freight Index (SCFI) only reflects Shanghai outbound rate development
• Freight rates on Asia / Europe trade remain volatile
• Freight rates on Transpacific trade tend to be somehow less volatile
• Freight rates on Latin America trade influenced by economical development in China and Brazil

Increasingly favourable supply side factors provide backdrop for profitable growth in the medium term

Scrapping is increasing (with Panama Canal expansion)

Declining incremental benefits of ever larger vessels

Balanced demand / supply growth by 20161)

1) 2015e and 2016e supply growth netted against expected scrapping

17 Source: IHS Global Insight July 2015, MDS Transmodal July 2015, Drewry, IMF July 2015, OECD

1) Transport volume by trade as at H1 2015

East-West: Substantial presence in important trades and leading expertise in niche businesses

28%

19 Source: Company Information, Alphaliner, Dynamar

North-South: Hapag-Lloyd with significantly strengthened market position in Latin America

New cooperation in Latin America

• Together with Hamburg Süd, CMA CGM and other shipping companies, Hapag-Lloyd will be offering new products between Asia and the western and eastern coasts of Latin America from July onwards
• These services will employ 53 ships in all, with Hapag-Lloyd contributing 19 of them. This includes CSAV's 7x 9,300 TEU newbuildings

1) Far East, Europe, North America to / from SAEC,SAWC and Caribbean / Central America, both directions

20 Source: Company Information, CTS FY 2014

Agenda

• A. Strategy "Way Forward" well on Track
• B. Industry Improving Mid-term Fundamentals
• C. Financials – Strong Earnings Growth Trajectory

Hapag-Lloyd significantly increased its EBITDA to USD 551 m (EBITDA margin: 10.6%) in the first half-year of 2015

	H1 2015	H1 2014	∆ / %
Transport volume [TTEU]	3,719	2,873	846 / 29.4%
Freight rate [USD/TEU]	1,296	1,424	-128 / (-9.0)%
Bunker price [USD/t]	346	592	-246 / (-41.6)%
Exchange rate [EUR/USD]	1.12	1.37	-0.25 / (-18.5)%
Revenue [USD m]	5,213	4,406	807 / 18.3%
EBITDA [USD m]	551	92	459 / 498.9%
EBIT [USD m]	299	-139	438 / n.a.
EAT [USD m]	176	-238	413 / n.a.
Investments [USD m]1)	504	303	202 / 66.3%

Operational KPIs

1) Balance sheet investments in PPE

■ 2015 first fiscal year with full reflection of CSAV transaction

Comments

Revenue

■ Transport volume increase and lower freight rate influenced by the CCS integration

Opex

• Substantially lower bunker price contributing to improvement
• Furthermore, substantial decrease in costs on the back of first achievements from strategic initiatives (CUATRO and OCTAVE)
• Advantageous change in EUR / USD exchange rate with positive impact

EBITDA

■ Step-change in H1 2015 due to significant cost savings

22 Source: Company Information

Transport volume [TTEU] Breakdown by trade [TTEU]

Freight rate1) [USD/TEU] vs. bunker price2) [USD/t]

1) Hapag-Lloyd average freight rate per year 2) Hapag-Lloyd average consumption price per year

24 Source: Company Information

Hapag-Lloyd remains focused on unit cost reduction

1) Cost of purchased services H1 2014: 1,049 USD/TEU

Global Trade Further Upside Good Start Industry Structure Project CUATRO Close deal and integrate CSAV business Targeted net synergies of USD400m in 2017 1 Project OCTAVE Short-term profit improvement in 8 modules EBIT savings of USD200m p.a. in 2016 2 Structural Improvements Align board structure and responsibilities 3 Close the Cost Gap Improve profitability in light of new alliances 4 Compete to Win New commercial approach (multi-year effort) 5

25 Source: Company Information

Benefits from a reduced bunker price and consumption – Change in bunker mix due to emission control areas

Bunker price [Rotterdam; USD/mt]

Bunker consumption [mt/slot; mt/TEU; k mt]

Bunker mix [MFO; MDO]

Bunker expenses4) [USD/TEU; USD m]

26 1) Average nominal deployed capacity in TEU 2) Hapag-Lloyd excl. CCS 3) Due to ongoing integration slight categorization differences may occur 4) Expenses for raw materials and supplies 5) FY 2014: USD 1,810 m / 5,907 TTEU = 307 USD/TEU; Q1 2014: USD 457 m / 1,399 TTEU = 327 USD/TEU

Note: Hapag-Lloyd reports in EUR. EBIT for peer converted based on the respective average exchange rate for H1 2014 and H1 2015 1) Includes terminal and other business 2) H1 2014 Hapag-Lloyd standalone, H1 2015 including CCS

27 Source: Company information, Alphaliner June 2015

Hapag-Lloyd further improved its capital structure – Equity at USD 5.2 bn (equity ratio: 43%)

Enhanced equity base

Strengthened liquidity reserve

Comments

Gearing

• Hapag-Lloyd improved its capital structure and is committed to maintaining a solid leverage
• Secure strong equity base
• Manage leverage structure to improve credit rating and increase cash flow through lower interest payments

Covenants and liquidity

• Hapag-Lloyd is subject to financial covenants which require (i) a book equity not less than the higher of (a) EUR 2.75 bn and (b) 30% of the total assets, and (ii) a minimum liquidity of USD 300 m at all times
• The financial covenants will be tested as of the last day of each financial quarter
• However, Hapag-Lloyd targets a minimum liquidity reserve of USD 0.9 bn; liquidity reserve has been shifted from cash on balance to credit lines
• On 06-Aug-2015, Hapag-Lloyd has entered into a revolving credit facility secured by containers in an amount of USD 135 m to further optimize its liquidity reserve

1) Liquidity reserve as % of financial debt 2) Cash and cash equivalents plus undrawn credit lines 3) Revolving credit facility entered in August 2015

Cash flow H1 2015 [USD m]

1) Including change of provision of USD -168 m 2) Revolving credit facility entered in August 2015

29 Source: Company Information

On the basis of H1 2015, Hapag-Lloyd expects a significant improvement in profitability in 2015

Guidance for 2015		Comments
Transport volume	Largely unchanged	 Guidance for 2015 based on pro-forma inclusion of CCS for 2014 – however, one-off volume and rate effects not taken into account in the guidance • CCS transport volume in 2014 at 1,924 TTEU • CCS avg. freight rate 2014 at 1,174 USD/TEU  In the 2014 consolidated financial statements CCS only included from 2 Dec 2014 (i.e. one month)
Freight rate	Decreasing moderately
EBITDA	Clearly increasing	Sensitivities for H2 2015
Operating		Transport volume	+/- 100 TTEU	+/- USD <0.1 bn
result1)	Clearly positive	Freight rate	+/- 50 USD/TEU	+/- USD ~0.2 bn
Liquidity reserve	Remaining adequate	Bunker price	+/- 100 USD/t	+/- USD ~0.15 bn
		EUR / USD	+/- 0.1 EUR/USD	+/- USD <0.1 bn

1) EBIT adjusted

30 Source: Company Information

	H1 2015	H1 2014	∆
Transport volume [TTEU]	3,719	2,873	846
Freight rate [USD/TEU]	1,296	1,424	-128
Revenue	5,213.4	4,405.7	807.7
Other operating income	115.8	36.1	79.7
Transport expenses	4,234.1	3,941.2	292.9
Personnel expenses	283.3	252.9	30.4
Depreciation, amortisation and impairment of intangible assets and property, plant and equipment	251.9	231.3	20.6
Other operating expenses	271.9	176.2	95.7
Operating result	288.0	-159.8	447.8
Share of profit of equity-accounted investeees	15.4	23.9	-8.5
Other financial result	-4.4	-3.2	-1.2
Earnings before interest and tax (EBIT)	299.0	-139.1	438.1
Interest result	-110.8	-94.3	-16.5
Earnings before income taxes	188.2	-233.4	421.6
Income taxes	-12.6	-4.2	-8.4
Group profit/loss	175.6	-237.6	413.2

Income statement Transport expenses

	H1 2015	H1 2014	∆
Transport expenses	4,234.1	3,941.2	292.9
Cost of raw materials, supplies and purchased goods	656.1	926.6	-270.5
Cost of purchased services	3,578.0	3,014.7	563.3
Thereof:			0.0
Port and terminal costs	1,593.6	1,320.4	273.2
Chartering, leases and container rentals	615.6	413.3	202.3
Container transport costs	1,275.2	1,184.2	90.9
Maintenance / repair / other	93.6	96.7	-3.1

EBIT bridge

	H1 2015	H1 2014	∆
Earnings before interest and tax (EBIT)	299.0	-139.1	438.1
Purchase price allocation	-30.3	17.4	-47.7
Transaction and restructuring costs	0.0	20.7	-20.7
Underlying EBIT	268.7	-101.0	369.7

	31.06.2015	31.03.2015	∆		31.06.2015	31.03.2015	∆
Goodwill	1,672.1	1,672.1	0.0	Equity	5,234.3	5,136.0	98.3
Other intangible assets	1,549.4	1,571.1	-21.7
Property, plant and equipment	6,576.1	6,496.6	79.5	Provisions	774.1	937.0	-162.9
Investments in equity-accounted investees	413.8	430.5	-16.7	Financial debt	4,420.2	4,430.1	-9.9
Inventories	174.7	163.5	11.2
Trade acocunts receivables	787.4	807.2	-19.8	Derivative financial instruments	41.8	73.2	-31.4
Other assets	232.2	266.6	-34.4	Trade accounts payable	1,445.3	1,511.9	-66.6
Derviative financial instruments	30.9	36.6	-5.7
Cash and cash equivalents	665.1	832.4	-167.3	Other liabilities	186.0	188.3	-2.3
Assets	12,101.7	12,276.5	-174.9	Equity and liabilities	12,101.7	12,276.5	-174.8

Assets Equity and liabilities

31.06.2015	31.03.2015	∆		31.06.2015	31.03.2015	∆
			Equity ratio	43%	42%	+1 ppt
			Closing Rate USD/EUR	1.12	1.07	0.04

Solid long-term and diversified financing portfolio

Source: Company information

	EUR Bond 2019	EUR Bond 2018	USD Bond 2017
Issuer	Hapag-Lloyd AG	Hapag-Lloyd AG	Hapag-Lloyd AG
Volume	EUR 250 m	EUR 400 m	USD 250 m
Minimum order	100,000 EUR	100,000 EUR	150,000 USD
Issue date	November 20, 2014	September 20, 2013	October 01, 2010
Maturity date	October 15, 2019	October 01, 2018	October 15, 2017
Redemption prices	as of Oct 15, 2016: 103.750% as of Oct 15, 2017: 101.875% as of Oct 15, 2018: 100%	as of Oct 01, 2015: 103.875% as of Oct 01, 2016: 101.938% as of Oct 01, 2017: 100%	as of Oct 15, 2014: 104.8750% as of Oct 15, 2015: 102.4375% as of Oct 15, 2016: 100%
Coupon	7.50%	7.75%	9.75%
Coupon payment	April 15 and October 15	January 15 and July 15	April 15 and October 15
ISIN	XS1144214993	XS0974356262	USD33048AA36
WKN	A13SNX	A1X3QY	A1E8QB
Listing	Open market of the LxSE	Open market of the LxSE	Open market of the LxSE
Trustee	Deutsche Trustee Company Limited	Deutsche Trustee Company Limited	Deutsche Bank AG, London Branch

Hapag-Lloyd bonds continuously trade above par

Hapag-Lloyd bonds

HL USD 9.75% 2017 HL EUR 7.75% 2018 HL EUR 7.50% 2019

YTW Hapag-Lloyd bonds
	9.75% 2017	7.75% 2018	7.50% 2019
Current Yield	9.1%	6.9%	7.0%
Current Trading	100.6%	101.6%	101.5%

Imbalances: Hapag-Lloyd outperforms the market

1) This ratio reflects the imbalance in the market (industry average) vs. Hapag-Lloyd imbalance of transport volumes (the higher the ratio, the more balanced in both directions). Ratio has been rounded

37 Source: IHS Global Insight July 2015; Hapag-Lloyd FY 2014; market data adapted to Hapag-Lloyd trade lane definition Long-standing and diversified customer base of blue chip customers and a diversified base of goods transported

Highly diversified customer base1) Strong relationship with blue chip customers

Hapag-Lloyd has a highly diversified customer base: No customer has a share greater than 5% of HL's revenue

Balanced portfolio of goods transported2)… … in a diversified customer portfolio3)

Source: Company information

38

1) Based on H1 2015 HL and CCS volumes 2) Figures based on H1 2015 volumes; for HL (eoy), for CSAV (B/L date) 3) Based on H1 2015 volumes, HL: sos; CSAV: B/L date 4) Others: FAK = Freight of all kinds

Henrik Schilling

39

Senior Director Investor Relations

Tel +49 40 3001-2896

Fax +49 40 3001-72896

Henrik.Schilling@hlag.com

http://www.hapag-lloyd.com/en/investor_relations/overview.html

STRICTLY CONFIDENTIAL

This presentation is provided to you on a confidential basis. Delivery of this information to any other person, the use of any third-party data or any reproduction of this information, in whole or in part, without the prior written consent of Hapag-Lloyd is prohibited.

This presentation contains forward looking statements within the meaning of the 'safe harbor' provision of the US securities laws. These statements are based on management's current expectations or beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, but not limited to, future global economic conditions, market conditions affecting the container shipping industry, intense competition in the markets in which we operate, potential environmental liability and capital costs of compliance with applicable laws, regulations and standards in the markets in which we operate, diverse political, legal, economic and other conditions affecting the markets in which we operate, our ability to successfully integrate business acquisitions and our ability to service our debt requirements). Many of these factors are beyond our control.

This presentation is intended to provide a general overview of Hapag-Lloyd's business and does not purport to deal with all aspects and details regarding Hapag-Lloyd. Accordingly, neither Hapag-Lloyd nor any of its directors, officers, employees or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the fairness, accuracy or completeness of the information contained in the presentation or of the views given or implied. Neither Hapag-Lloyd nor any of its directors, officers, employees or advisors nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection therewith.

The material contained in this presentation reflects current legislation and the business and financial affairs of Hapag-Lloyd which are subject to change and audit, and is subject to the provisions contained within legislation.

The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this presentation comes are required to inform themselves about and to observe any such restrictions. In particular, this presentation may not be distributed into the United States, Australia, Japan or Canada.

This presentation constitutes neither an offer to sell nor a solicitation to buy any securities in the United States, Germany or any other jurisdiction. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. In particular, this presentation does not constitute an offer to sell or a solicitation of an offer to buy securities of Hapag-Lloyd in the United States. Securities of Hapag-Lloyd may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Hapag-Lloyd does not intend to conduct a public offering or any placement of securities in the United States.